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Credit Score Blueprint: Everything You Need to Know

What Determines Your FICO Score?

Your FICO score is calculated using various credit-related data from your credit report. The credit information that determines your FICO score can be grouped in to five categories: payment history, credit utilization, length of credit history, new credit, and types of credit used.

Figure 5: The importance of various factors in determining your FICO score.

Payment History

  • Account payment information (includes credit cards, retail cards, finance company accounts, installment loans, mortgage, etc.)
  • Existence of derogatory public records (suits, liens, wage garnishments, bankruptcy, judgments, etc.), delinquencies (past due items), and collection items
  • Severity and number of delinquencies
  • Amounts and recency of delinquencies, adverse public records, and/or collection items
  • Number of accounts paid as agreed

Credit Utilization

  • Total amounts owing on accounts
  • Amounts owing on specific kinds of accounts, including revolving credit accounts and non-mortgage installment loans (owing large amounts on these types of accounts indicates greater risk to lenders)
  • Lack of a specific type of balance, such as no recent non-mortgage balance or no recent revolving balances
  • Number of accounts with balances
  • Proportion of credit lines used (also referred to as your debt-to-limit ratio or debt utilization rate)
  • Proportion of installment loan amounts still owing

Length of Credit History

  • Time since accounts were opened
  • Time since specific types of accounts were opened
  • Recency of account activity

New Credit

  • Number of recently opened accounts, and proportion of recently opened accounts to  total accounts (Type of recently opened account is also important)
  • Number and recency of credit card inquiries
  • Time since most recent account openings, by type of account
  • Positive credit history since past payment issues

Types of Credit Used

  • Number, presence and prevalence of various account types (mortgages, consumer finance accounts, installment loans, retail accounts, credit cards, etc.)
  • Any recent information on various types of accounts

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